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Last updated: August 4, 2026
Employment Cost Calculator for United Kingdom
Calculate your complete hiring costs for United Kingdom employees, including payroll taxes, social security contributions, employee benefits, and management fees. This salary calculator provides accurate employer cost estimates for informed hiring decisions.
Calculate Employment Costs
Employment Cost Breakdown
Select a country and enter a salary to see the employment cost breakdown
Employer Tax Contributions
| Tax Type | Rate | Base |
|---|---|---|
| Employer's National Insurance (Class 1 Secondary) | 15% (from April ) | Employee earnings above £5,000 annually (from April ) |
| Apprenticeship Levy | 0.5% | Annual pay bill over £3 million |
| PAYE Income Tax | Employee's marginal rates | Employee's gross pay |
Filing & Compliance
- Register as an employer with HMRC before your first payday if you pay an employee £96 or more weekly, employ someone receiving a pension, or use subcontractors under the Construction Industry Scheme.
- PAYE (Pay As You Earn) payments are due by the 22nd of the next tax month if paying electronically, or by the 19th if paying by post.
- Submit final PAYE submission (FPS) for the tax year by April 19.
Income Tax Brackets
| Income Range | Tax Rate |
|---|---|
| Up to £12,570 | 0% |
| £12,571 to £50,270 | 20% |
| £50,271 to £125,140 | 40% |
| Over £125,140 | 45% |
Employee Contributions
| Deduction Type | Rate | Cap |
|---|---|---|
| National Insurance (Class 1) | 8% | On earnings between £12,570 and £50,270 annually |
| National Insurance (Class 1) | 2% | On earnings over £50,270 annually |
| Student Loan (Plan 1) | 9% | On earnings over £26,900 annually |
| Student Loan (Plan 2) | 9% | On earnings over £29,385 annually |
Personal Allowances
- Standard Personal Allowance: £12,570
- Allowance reduces by £1 for every £2 earned over £100,000
- Allowance is zero if income is £125,140 or above
Written by
Lucas Botzen
Lucas Botzen is the Founder of Rivermate, a global employment platform that helps companies hire, employ, and manage talent internationally. Since founding Rivermate in December 2020, he has focused on building practical solutions that simplify international payroll, benefits, taxes, contracts, and employment compliance for remote teams. Before Rivermate, Lucas co-founded and co-directed Boloo, an e-learning and software company that helped entrepreneurs start and grow e-commerce businesses. He scaled Boloo to more than €2 million in annual revenue before successfully exiting the business in 2020. Lucas holds a Bachelor’s degree in Business Innovation from Avans University of Applied Sciences. His background in entrepreneurship, technology, automation, and remote work continues to shape his approach to making global employment simpler and more human.
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